Fri, May 25, 2018 - Page 10 News List

US mulls levying tariffs on car imports

REACTION:Tokyo said such a move would plunge the market into confusion, Seoul said it would consider countermeasures and Beijing criticized the use of national security clauses


The US Department of Commerce on Wednesday said it launched an inquiry that could allow US President Donald Trump’s administration to impose tariffs on auto imports over national security concerns.

US Secretary of Commerce Wilbur Ross announced he initiated a so-called Section 232 investigation on auto trade — which would provide the legal basis to impose tariffs, if his department finds imports threaten US national security — after speaking with Trump on the matter.

“There is evidence suggesting that, for decades, imports from abroad have eroded our domestic auto industry,” Ross said. “The Department of Commerce will conduct a thorough, fair, and transparent investigation into whether such imports are weakening our internal economy and may impair the national security.”

In a separate statement released by the White House, Trump said he had “instructed” Ross to “consider” kicking off the probe.

“Core industries such as automobiles and automotive parts are critical to our strength as a nation,” the statement said.

The Trump administration had used the same justification to slap steep tariffs on steel and aluminum, raising the specter of a trade war.

A similar move in the auto industry would open yet another front in the Republican president’s confrontational rows over trade that have drawn global outcry from allies and partners.

The latest announcement comes as negotiations with Canada and Mexico over revamping the continent-wide North American Free Trade Agreement have stalled over auto demands.

The Wall Street Journal reported on Wednesday that Trump was asking for vehicle import tariffs as high as 25 percent.

Trump has frequently lambasted China’s high import duties on foreign cars. During recent negotiations, Chinese President Xi Jinping (習近平) offered to cut the rate from 25 percent to 15 percent.

The Journal, citing sources in the auto industry, said US moves to retaliate likely would face significant opposition from trading partners and auto dealers that sell imports.

Tokyo was quick to lash out, with Japanese Minister of Economy, Trade and Industry Hiroshige Seko yesterday saying that such a move would “plunge the world market into confusion” and be “extremely regrettable.”

Passenger cars make up about 30 percent of Japan’s total exports to the US and Tokyo has already threatened Washington with retaliation at the WTO for the steel tariffs.

South Korea’s government said it has formed a task force with automakers and car associations to review the potential impact on the local auto industry of the US move and to consider countermeasures.

Beijing also weighed in, with a Ministry of Commerce spokesman saying: “China opposes the abusing of national security provisions, which would severely undermine the multilateral trading system, and disrupt the normal trade order.”

Volkswagen AG warned against protectionism.

“One-sided protectionism has never helped anyone in the long term. Only free and fair trade secures increased prosperity” a spokesman for the Wolfsburg, Germany-based group said.

Additional reporting by Bloomberg

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